Bendigo and Adelaide Bank looks to take over smaller rivals in bid to increase market share

The Bendigo and Adelaide Bank is eyeing small rivals as potential takeover targets in a bid to raise its market share.

Chief executive officer Mike Hirst says the bank is aiming to raise its market share from 3 per cent to 10 per cent.

Mr Hirst says the bank is looking into buying out regional credit unions, but admits it will not be easy.

"We'd need to do organic and inorganic growth to get up to that level," Mr Hirst told the ABC's Inside Business.

"Certainly the Residential Mortgage-Backed Securities market (RMBS) would help in providing some of that opportunity but rationalisation and consolidation would also have to occur for that to happen.

"I think everybody is having to look at what the future holds and if there's opportunities there for us, and it makes sense for us and it makes sense for the credit unions, we'll certainly look to explore that."

Mr Hirst says he has not recently spoken to the Bank of Queensland to discuss a possible merger.

"We haven't a chat with them for quite some time," he said.

"[Bank of Queensland chief] Stuart Grimshaw is in there with his new team and seems to be doing a really good job at re-establishing that business.

"I think they've probably got a way to go before they do that, so I think they can have that space."

Hirst unconcerned about property market rise

Meanwhile, Mr Hirst says he is not currently worried about the property market, despite climbing house prices which show average capital city prices have reached a record $500,000.

Figures released last week by property researcher RP Data also show Sydney and Melbourne markets have risen 2.5 per cent in the past month.

Despite the figures Mr Hirst says he is "reasonably confident things will be okay".

"I don't think it's too hot at the moment. I don't believe it's going to become too hot," he said.

"I think there's been relatively subdued growth leading up to this so there's a bit of catch-up.

"Sydney seems to be the hottest spot, and I think most people consider that it missed out on some of the rise in the earlier part of the decade."

Mr Hirst says the Reserve Bank has done a "very good job" with the economy since the global financial crisis, adding that a regulatory intervention would be unnecessary.

"They've always got a lot of juggling to do and the dollar is an issue for other parts of the economy," he said.

"Keeping the dollar at a better level and interest rates higher is really a difficult thing for them to do, but so far so good.

"There's very prudent lending still going on here, and I think from everything I see, the banks are still keeping their stress testing of serviceability at reasonable levels, and APRA (Australian Prudential Regulation Authority) continues to remind us be to prudent with our lending.

"As long as that's the case, I don't see a need for any other intervention."

Mr Hirst says the Bendigo and Adelaide Bank has not experienced any noticeable trend of self-managed super funds gearing up and getting into property.

"We're not seeing that a lot in our book but I'm not sure that we're really competitive in that space," he said.

"You probably need to talk to the major banks about how they're seeing that work its way through."